UTI Mutual Fund tops tally of Rank 1 Funds: CRISIL Research

UTI Mutual Fund topped the tally of CRISIL Fund Rank 1 schemes with 7 of their funds in the top cluster as per the latest CRISIL Mutual Fund Rankings for the quarter ended March 2013. This was followed by SBI Mutual Fund with 6 funds. The rankings saw 46 out of 470 funds in the top cluster followed by 93 funds in the second cluster. During the quarter under review, top ranked funds from large cap, diversified and small & mid-cap categories beat their benchmarks on the back of allocations in information technology (IT), telecom and fast moving consumer goods (FMCG). On the other hand, lower ranked funds had a higher exposure to banks, construction, capital goods and metals which gave negative returns

Within debt categories, gilt funds were the top performers during the quarter under review, followed by income funds. The performance was primarily on account of fall in interest rates. Bond prices and yields move in opposite directions and hence fall in interest rates benefits long term debt oriented funds. The Reserve Bank of India (RBI) cut the repo rate by 25 basis points each on January 29, 2013 and March 19, 2013. This resulted in a fall in the 10-year government bond yield from 8.05% to 7.95% over the quarter. RBI also cut the Cash Reserve Ratio (CRR) by 25 basis points on January 29, 2013.